Canada Pension Plan Investment Board is launching an “in-house hedge fund” in its London office with the hire of fund management veteran Dureka Carrasquillo from Tranberg Capital Management.

Canada Pension Plan starts ‘in-house hedge fund’

Alain Carrier, head of Europe for CPPIB, said the fund wanted to hire a team of “four to five professionals” that would build a long/short portfolio targeted at Europe, the Middle East and Africa.

Although a separate person familiar with the matter said the new team would, in effect, act as an “in-house hedge fund”, Carrier played down the use of such terminology, instead stressing that it was part of the firm’s wider strategy to invest in public markets.

Although various pension funds have built direct capability to do deals for private equity and real estate investments in London in recent years, it remains unusual for funds to adopt a strategy of investing in long/short equities. Most prefer to allocate money through hedge funds of funds rather than building up their own capability.

Carrier said: “There is a team in Toronto that does this. We think European equities remain very attractive. It is in the context of us building out our London office; the one set of our business that has not been present is the public side.”

Carrasquillo was previously at a private family office, Tranberg Capital Management, and before that worked at Invesco and Partner Fund Management, according to Carrier.

Toronto-based CPPIB, which oversees about C$193 billion ($175 billion) in assets, has offices in London and Hong Kong and last month opened offices in New York and Brazil. Its London office, which opened in 2008, now has about 60 staff and Carrier said he expects that number “will grow substantially”. The firm hired Mark Corbidge, the former co-head of private equity at Doughty Hanson, in December.